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US releases $280 million for energy sector

The US Congress has released $280 million in new US assistance to support Pakistan’s energy sector, which has been termed a positive move for the country’s crippling energy sector, said a press release on Friday.

The funds will support improvements to Mangla Dam and infrastructure support and due diligence work on the Kurram Tangi Dam project. This is the latest example of the United States’ long-term and enduring support for Pakistan’s energy sector and for the people of Pakistan, the press release said.

Khurram Schehzad, Head of Research at InvestCap said that this aid would have a positive impact on the entire energy sector. “Though the $280 million is not a very significant amount but the good thing is that the aid has started pouring in,” he added. The US approach consists of high-impact projects aimed at increasing Pakistan’s energy resources and helping power sector institutions more effectively meet the country’s energy needs.

Ahsan Mehanti at Arif Habib Corporation said that this would have a positive impact and help expansion. Besides, it would also fund up the current account.

The United States funds large-scale infrastructure efforts that, by 2013, are expected to add 900 megawatts to the national power grid, enough energy to power two million households and businesses.

“Our institutional support ranges from improving the governance of the power sector to strengthening the performance of Pakistan’s power distribution companies. We are helping develop new policies to rationalise pricing, reduce subsidies, increase revenues, and improve the distribution of energy resources. We also work with private sector entities and civil society organizations to enhance their role in decision-making and advocacy,” the statement added.

Ongoing projects supported by the United States include the Gomal Zam Dam, which will generate 17.4 megawatts of hydroelectric power – enough to supply electricity to 30,000 households and irrigate almost 200,000 acres of land worked by 30,000 farmers; the Satpara Dam, which will provide 17.7 megawatts of power to the local grid – enough to supply electricity to 30,000 households and mitigate flooding, provide water for irrigation, and serve as a significant source of drinking water; the Muzzafargarh Power Station, which will increase the generation capacity of the power station by 475 megawatts, enough power to supply electricity to about 680,000 households; the Jamshoro Power Station project, which will enable the station to restore at least 150 megawatts of power generation capacity, enough power to supply electricity to about 215,000 households; and the Tarbela Dam modernisation project, which will add 128 megawatts in power generation capacity.